Governance Matters: Estonia is one of the world’s leading governments in digital transformation. How did this happen and what made it possible?

Siim Sikkut: Estonia has long worked from the philosophy that securing effective government as a small nation of just 1.3 million people requires us to be at the forefront of innovation. Our experiments in digital transformation started in the 1990s and quickly showed that the internet could help government deliver more, and deliver it better. After our initial experiments, we intentionally scaled up our reliance on digital solutions very quickly. Adopting certain platforms early on, such as the national digital identity, saved us a lot of time because it provided a strong foundation to work from. 

We also deliberately built partnerships with companies and research institutions. We have to use all the talents we can and as a small country, that means reaching out to people outside government. Underpinning it all was the Estonian Government’s high willingness to take risks and try things, such as e-voting, that had not been done anywhere else. 

What are the most important building blocks that a government needs in order to enjoy a successful digital transformation?

The most fundamental thing is service design. Your information technology (IT) infrastructure is important, of course. So too is your data strategy. However, while these are good foundations, service design is what defines success. 

In a global marketplace, everybody has access to similar technology. What sets successful countries apart is how they choose to use it, whether they have the right mindset, and are willing to change the way they work. If this service design is right, you are on the path to success.

What are the main capabilities that governments have to put in place?

There are two main types of capabilities that need to be developed. The first is technical. You need coders, data scientists, and other specialists. 

The second is becoming more widely known as “digital leadership skills”. This is more related to operational capabilities, rethinking processes and systems. It might include understanding where technology is going, leading efforts to be more data-driven throughout the organisation, working on user-centric service design, and managing technical teams. These are skills that should be developed not just in digital specialists but across mid- and top-tier management levels.

Based on Estonia’s experience, what advice would you give to practitioners who might be struggling to convince their colleagues of the merits of digital transformation?

You need to bring people together, have them talk to each other and develop an understanding of each other’s needs and expertise. When we were trying to start the uptake of artificial intelligence (AI) in Estonia, we held ideation sessions to bring together agencies, service owners, policymakers, and machine-learning experts. Those sessions educated the government side about the technology, and the technology side about what the business of government really involves. From that, we got dozens of concrete AI experiments, and uptake really grew.

What do you think makes a successful digital leader in government, and what are the most important attributes and qualities that a leader overseeing digital transformation should have?

I just published my first book, Digital Government Excellence: Lessons from Effective Digital Leaders (Wiley, 2022), which is a collection of interviews with 20 digital government leaders from around the world. The number one trait among them is that they are all fixated on delivery. They are obsessed with getting things done. Having the skills to succeed in that area is absolutely fundamental. 

Another thing they have in common is that they are all great strategists. Working out a vision is often a core element of the role. Civil servants’ political masters tend not to give them very clear direction in the area of digital government. You frequently see political leaders turning to those leading digital transformation and asking them, “Well, what are you going to do then?” Leaders operating under a very vague mandate need to show vision and a clear understanding of strategy.

What are some of the biggest challenges governments face when carrying out digital reforms?

We could talk about this for a long time, but the biggest challenges come down to four mindset issues. The first is a fear of the technology going wrong. People are worried about getting hacked or their data being stolen or something of a similar order.
We know from Estonia and elsewhere that those risks can be managed to a level that is more than acceptable, but that fear still overwhelms people. 

The second is a lack of willingness to change. If people are not open to transforming their ways of working, then digital transformation will simply not happen. 

The third is fear of failure. Many governments are too afraid to take risks and try things. That kills innovation and transformation.

The fourth issue is a refusal to try and learn from what has happened elsewhere. We get several delegations a day coming to Estonia to learn from our experiences and very few ever implement the changes because they just say Estonia is too small, or we are a special case, or some other excuse. More than 60 countries from around the world have now learned and applied our lessons, but that has not stopped many others from limiting themselves because they choose not to listen. 

Digital innovation seems to be a buzzword that is used a lot in the public sector these days. What are some tangible and meaningful ways that governments can foster digital innovation? Can you share any examples from Estonia or other countries? 

In Estonia, instead of trying to find ways to run innovation centrally, we have looked to empower innovation from the bottom up. Governments are made up of people working across very different domains with very different responsibilities. The key to innovation is encouraging people in different government roles to think creatively about how they can make the most of digital technology. 

You can see this approach in the way the Estonian office of the Chief Information Officer’s (CIO) currently operates. The CIO office sets a strategy and the roadmap to achieving the strategy. For example, the strategy may suggest that AI should be better used across government. The CIO office then uses its funding to try and provide incentives for experimentation and the development of new ideas across government to contribute towards that broader vision. 

The process of co-creation has been a cornerstone of Estonia’s success. I mentioned our openness to partnerships earlier, and that has been really helpful in terms of innovation. We developed a legal framework called “Testbed” which basically allows a company or academic institution to come to the Government with a novel solution, and they can try it out on the government technology stack and see if it works. If it works, the Government can have access to their technology and in return they get a good practical reference and a good setting in which to test it. 

Lower-income countries will face additional challenges, such as raising funds. What advice would you have?

Nothing worth having comes for free. Thankfully, there is funding available from international donors and financial institutions to get digital transformation projects off the ground. The real challenge is that once you have built a new system, you need money to maintain and improve it. It is vital to see all this money as an investment. Digital transition is a game-changer for governments and those that do manage it will have the upper hand and go on to achieve more. 

There are certain things low-income countries can focus on. One is achieving early wins. It is important to show that digital really is the way forward. Things like moving some simple services online or getting rid of noticeable bureaucracy can buy you time and support.

Ultimately, though, securing digital transformation is a laborious, unglamorous process of working hard to put all the right details in place. A lot of what resource-challenged countries need to do is build good governance systems to enable them to do that work well. 

You have talked about the importance both of having a strong roadmap and of allowing innovation to flourish from the ground up. In many countries, a coordinating body within government takes charge of this roadmap. In your view, what makes a good coordinating body for innovation within government?

If I look at some examples around the world, two things stand out to me. The first is that you have to have what we might call a serving mindset. The best coordinators do not arrogantly boss people around; they are focused on helping the ministries and agencies they work with by empowering and engaging them. 

The second is that you have to be relentless. Things will go wrong along the way, people will not fall into line, and there will be fights and disputes. Keeping at it, continuing to use all the levers available to you, is a really core part of achieving success. 

What were some of your most memorable experiences as Estonia’s CIO and what advice do you have for other government leaders in similar positions?

The highlights were the times we were able to take world-leading next steps. Getting AI tested in government or working during Estonia’s presidency of the European Union to define the digital agenda for the whole of Europe were very special. The best was seeing these ideas really take off and gain traction. 

If I were to offer any advice, it would be to emphasise three things I mentioned earlier. First, you need a relentless focus on delivery. Second, embrace the start-up culture; be agile and take risks. Third, do not be afraid to learn from others. It is silly to waste time and resources learning the same painful lessons that somebody else could have shared with you from their own experience.